Techno-Economic evaluation of single and multi-purpose grid-scale battery systems
As the technological evolution continuously flourishes, battery cell prices plunge and political debates about sustainable innovation heat up, the economic attractiveness of battery energy storage systems gets stimulated. The recent development in the German political sphere is driving the transformation in energy generation from traditional to sustainable energy supply. Whereas most research analyzes the potential of single-purpose battery energy storage systems, few studies prove the techno-economic benefits of this technology and its ability to serve multiple purposes. This study evaluates the economic implications of such batteries with a simulation model designed to optimize the return of investment and net present value for a project scope of 20 years while serving as frequency containment operators. The model simulates one year with real data of the Continental European grid frequency, the EPEX electricity market, and load and generation profile of a northern German distribution grid and scales the results with respect to the battery's degradation. Enhanced frequency response and primary control reserve are compared on their technical and economic feasibility as well as their combination with peak shaving applications. The results of the simulations indicate that the enhanced frequency response has the highest profitability and performance for battery energy storage systems. Adding the peak shaving application can improve the profitability and de-stress the grid. In any case, larger battery dimensions regarding capacity and power are linked to higher investment costs and thereby reduce the overall return on investment.
Return on investment